IRON MOUNTAIN INCIRM
IRON MOUNTAIN INC Income Taxes Disclosure
INCOME TAXES
We have been organized and have operated as a REIT effective beginning with our taxable year that ended on December 31, 2014. As a REIT, we are generally permitted to deduct from our federal taxable income the dividends we pay to our stockholders. The income represented by such dividends is not subject to federal taxation at the entity level but is taxed, if at all, at the stockholder level. The income of our domestic TRSs, which hold our domestic operations that may not be REIT-compliant as currently operated and structured, is subject, as applicable, to federal and state corporate income tax. In addition, we and our subsidiaries continue to be subject to foreign income taxes in other jurisdictions in which we have business operations or a taxable presence, regardless of whether assets are held or operations are conducted through subsidiaries disregarded for federal income tax purposes or TRSs. We will also be subject to a separate corporate income tax on any gains recognized on the sale or disposition of any asset previously owned by a C corporation during a five-year period after the date we first owned the asset as a REIT asset that are attributable to "built-in gains" with respect to that asset on that date. We will also be subject to a built-in gains tax on our depreciation recapture recognized into income as a result of accounting method changes in connection with our acquisition activities. If we fail to remain qualified for taxation as a REIT, we will be subject to federal income tax at regular corporate income tax rates. Even if we remain qualified for taxation as a REIT, we may be subject to some federal, state, local and foreign taxes on our income and property in addition to taxes owed with respect to our TRS operations. In particular, while state income tax regimes often parallel the federal income tax regime for REITs, many states do not completely follow federal rules and some do not follow them at all.
The significant components of our deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 are presented below:
| DECEMBER 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred Tax Assets: | |||||||||||
| Accrued liabilities and other adjustments | $ | 158,987 | $ | 156,349 | |||||||
| Net operating loss carryforwards | 173,024 | 168,773 | |||||||||
| Valuation allowance | (152,605) | (132,714) | |||||||||
| 179,406 | 192,408 | ||||||||||
| Deferred Tax Liabilities: | |||||||||||
| Other assets, principally due to differences in amortization | (177,675) | (185,301) | |||||||||
| Property, plant and equipment, principally due to differences in depreciation | (37,915) | (63,192) | |||||||||
| Other | (116,082) | (122,844) | |||||||||
| (331,672) | (371,337) | ||||||||||
| Net deferred tax (liability) asset | $ | (152,266) | $ | (178,929) | |||||||
The deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 are presented below:
| DECEMBER 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets (Included in Other, a component of Other assets, net) | $ | 31,749 | $ | 26,412 | |||||||
| Deferred tax liabilities | (184,015) | (205,341) | |||||||||
At December 31, 2025, we have federal net operating loss carryforwards of $116,233 and disallowed interest expense carryforwards of $185,852 both of which can be carried forward indefinitely, and of which $109,868 and $64,556, respectively, are expected to be realized to reduce future federal taxable income. We have assets for foreign net operating losses of $146,255 and foreign disallowed interest expense carryforwards of $46,625, with various expiration dates (and in some cases no expiration date), subject to valuation allowances of approximately 77.5% and 26.8%, respectively. If actual results differ unfavorably from certain of our estimates used, we may not be able to realize all or part of our net deferred income tax assets and additional valuation allowances may be required. Although we believe our estimates are reasonable, no assurance can be given that our estimates reflected in the tax provisions and accruals will equal our actual results. These differences could have a material impact on our income tax provision and operating results in the period in which such determination is made.
A rollforward of the valuation allowance is as follows:
| YEAR ENDED DECEMBER 31, | BALANCE AT BEGINNING OF THE YEAR | CHARGED (CREDITED) TO EXPENSE | OTHER INCREASES/(DECREASES)(1)(2) | BALANCE AT END OF THE YEAR | |||||||||||||||||||
| 2025 | $ | 132,714 | $ | 16,740 | $ | 3,151 | $ | 152,605 | |||||||||||||||
| 2024 | 103,897 | 37,018 | (8,201) | 132,714 | |||||||||||||||||||
| 2023 | 47,514 | 4,855 | 51,528 | 103,897 | |||||||||||||||||||
(1)Other decreases and increases in valuation allowances are primarily related to changes in foreign currency exchange rates and prior year acquisitions.
(2)In connection with the implementation of the Organization for Economic Co-operation and Development (the "OECD") global minimum tax initiative known as Pillar Two, any existing deferred taxes not disclosed in our 2023 financial statements will not be available in the future to reduce tax otherwise due under Pillar Two. Accordingly, in 2023, the above table includes the tax effects of these non-United States tax loss carryforwards, which were not previously disclosed in the prior years due to the remote possibility of realization, offset with a full valuation allowance.
The components of Net Income (Loss) Before Provision (Benefit) for Income Taxes for the years ended December 31, 2025, 2024 and 2023 are as follows:
| YEAR ENDED DECEMBER 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | 227,656 | $ | 56,617 | $ | 76,012 | |||||||||||
| Canada | 149,219 | 153,450 | 111,331 | ||||||||||||||
| Other Foreign | (165,687) | 34,471 | 39,863 | ||||||||||||||
| Net Income (Loss) Before Provision (Benefit) for Income Taxes | $ | 211,188 | $ | 244,538 | $ | 227,206 | |||||||||||
The Provision (Benefit) for Income Taxes for the years ended December 31, 2025, 2024 and 2023 consist of the following components:
| YEAR ENDED DECEMBER 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Federal—current | $ | 4,687 | $ | 5,205 | $ | 1,255 | |||||||||||
| Federal—deferred | (7,450) | (2,394) | (18,488) | ||||||||||||||
| State—current | 5,543 | 914 | 1,544 | ||||||||||||||
| State—deferred | (1,898) | (3,731) | (4,630) | ||||||||||||||
| Foreign—current | 96,386 | 96,168 | 72,408 | ||||||||||||||
| Foreign—deferred | (38,334) | (35,290) | (12,146) | ||||||||||||||
| Provision (Benefit) for Income Taxes | $ | 58,934 | $ | 60,872 | $ | 39,943 | |||||||||||
Pursuant to the disclosure requirements of ASU 2023-09, a reconciliation of Provision (Benefit) for Income Taxes and the "expected" tax provision computed by applying the current federal statutory tax rate of 21.0% to Net Income (Loss) Before Provision (Benefit) for Income Taxes for the year ended December 31, 2025 is as follows:
YEAR ENDED DECEMBER 31, 2025 | |||||||||||
| Amount | Percentage of Net Income (Loss) Before Provision (Benefit) for Income Taxes | ||||||||||
| Computed "expected" tax provision | $ | 44,349 | 21.0 | % | |||||||
United States(1) | |||||||||||
| State and local income taxes | 4,388 | 2.1 | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| Foreign branch taxes | (13,323) | (6.3) | % | ||||||||
| Global intangible low-taxed income | 9,492 | 4.5 | % | ||||||||
| Other | (192) | (0.1) | % | ||||||||
| Changes in valuation allowances | 7,956 | 3.8 | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| Dividends paid deduction | (73,458) | (34.8) | % | ||||||||
| Nondeductible foreign exchange loss (gain) | 9,616 | 4.6 | % | ||||||||
| Nondeductible officers compensations | 32,049 | 15.2 | % | ||||||||
| Excess tax benefits on equity compensations | (32,343) | (15.3) | % | ||||||||
| Nondeductible management fees | 3,725 | 1.7 | % | ||||||||
| Other | 3,780 | 1.7 | % | ||||||||
| Canada | |||||||||||
| Effect of rates different than statutory | (8,938) | (4.2) | % | ||||||||
| State and local income taxes | 17,140 | 8.1 | % | ||||||||
| Withholding tax | 7,506 | 3.6 | % | ||||||||
| Other | 695 | 0.3 | % | ||||||||
| China | |||||||||||
| Nondeductible (gain) loss on sale of assets | (7,318) | (3.5) | % | ||||||||
| Other | 1,309 | 0.6 | % | ||||||||
| Peru | |||||||||||
| Other | 2,235 | 1.1 | % | ||||||||
| Netherlands | |||||||||||
| Effect of rates different than statutory | (4,358) | (2.1) | % | ||||||||
| Changes in valuation allowance | 3,062 | 1.4 | % | ||||||||
| Nondeductible foreign exchange loss (gain) | 19,839 | 9.4 | % | ||||||||
| Other | (2,083) | (1.0) | % | ||||||||
| Switzerland | |||||||||||
| Nondeductible loss (gain) on sale of asset | 2,911 | 1.4 | % | ||||||||
| Other | 2,483 | 1.2 | % | ||||||||
| United Kingdom | |||||||||||
| Effect of rates different than statutory | (3,442) | (1.6) | % | ||||||||
| Nondeductible foreign exchange loss (gain) | 5,888 | 2.8 | % | ||||||||
| Other | 2,865 | 1.4 | % | ||||||||
| Hong Kong | |||||||||||
| Other | 2,315 | 1.1 | % | ||||||||
YEAR ENDED DECEMBER 31, 2025 | |||||||||||
| Amount | Percentage of Net Income (Loss) Before Provision (Benefit) for Income Taxes | ||||||||||
| Germany | |||||||||||
| Other | $ | 2,586 | 1.2 | % | |||||||
| India | |||||||||||
| Changes in valuation allowance | 3,869 | 1.8 | % | ||||||||
| Other | 1,012 | 0.5 | % | ||||||||
| Other foreign jurisdictions | 10,996 | 5.2 | % | ||||||||
| Changes in unrecognized tax benefits | 2,323 | 1.1 | % | ||||||||
| Provision (Benefit) for Income Taxes | $ | 58,934 | 27.9 | % | |||||||
(1)In 2025, state and local taxes in Tennessee, Pennsylvania and Texas made up the majority (greater than 50%) of the tax effect in this category.
A reconciliation of Provision (Benefit) for Income Taxes and the "expected" tax provision computed by applying the current federal statutory tax rate of 21.0% to Net Income (Loss) Before Provision (Benefit) for Income Taxes for the years ended December 31, 2024 and 2023, respectively, is as follows:
| YEAR ENDED DECEMBER 31, | |||||||||||
| 2024 | 2023 | ||||||||||
Computed "expected" tax provision | $ | 51,353 | $ | 47,713 | |||||||
| Changes in income taxes resulting from: | |||||||||||
| Tax adjustment relating to REIT | (33,926) | (39,299) | |||||||||
| State taxes, net of federal tax benefit | (2,919) | (3,147) | |||||||||
| Increase (decrease) in valuation allowance | 37,018 | 4,855 | |||||||||
| Withholding taxes | 11,359 | 11,658 | |||||||||
| (Reversal) reserve accrual and audit settlements, net of federal tax benefit | (2,052) | (4,946) | |||||||||
| Change in valuation of acquisition contingencies | 643 | 3,242 | |||||||||
| Foreign tax rate differential | 13,322 | 6,876 | |||||||||
| Adjustments relating to foreign taxes | (10,346) | 14,405 | |||||||||
| Excess tax benefits on equity compensation | (5,047) | (1,905) | |||||||||
| Other, net | 1,467 | 491 | |||||||||
| Provision (Benefit) for Income Taxes | $ | 60,872 | $ | 39,943 | |||||||
Our effective tax rates for the years ended December 31, 2025, 2024 and 2023 were 27.9%, 24.9% and 17.6%, respectively. Our effective tax rate is subject to variability in the future due to, among other items: (i) changes in the mix of income between our QRSs and our TRSs, as well as among the jurisdictions in which we operate, (ii) tax law changes, (iii) volatility in foreign exchange gains and losses, (iv) the timing of the establishment and reversal of tax reserves, (v) our ability to utilize net operating losses and interest expenses that we generate and (vi) the taxability or deductibility of significant transactions.
The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate were:
| YEAR ENDED DECEMBER 31, | ||||||||
| 2025 | 2024 | 2023 | ||||||
The lack of tax benefits recognized for the foreign exchange losses of $26,948 and ordinary losses and disallowed interest expenses of certain entities of $16,740, as well as withholding tax expenses of $15,203, partially offset by the net benefits derived from the dividends paid deduction of $52,601. | The lack of tax benefits recognized for the ordinary losses and disallowed interest expenses of certain entities of $37,018 and differences in the tax rates to which our foreign earnings are subject of $13,322, partially offset by the benefits derived from the dividends paid deduction of $33,926. In addition, we recorded gains and losses in Other expense (income), net during the period, for which there was no tax impact. | The benefits derived from the dividends paid deduction of $39,299 and the differences in the tax rates to which our foreign earnings are subject of $6,876. In addition, there were gains and losses recorded in Other expense (income), net for which there was no tax impact. | ||||||
As a REIT, we are entitled to a deduction for dividends paid, resulting in a substantial reduction of federal income tax expense. As a REIT, substantially all of our income tax expense will be incurred based on the earnings generated by our foreign subsidiaries and our domestic TRSs.
We provide for foreign withholding taxes on the undistributed earnings of our foreign TRSs because it is not our intention to reinvest the undistributed earnings of our foreign TRSs indefinitely outside the United States. As a REIT, future repatriation of incremental undistributed earnings of our foreign subsidiaries will not be subject to federal or state income tax.
The OECD has issued proposals that change long-standing tax principles, including a global minimum tax rate of 15% ("Pillar Two"). While the United States has not enacted legislation to effectuate Pillar Two, Iron Mountain operates in many foreign jurisdictions that have enacted legislation to implement Pillar Two. Pillar Two became applicable for Iron Mountain beginning in 2024. Recent G7 Country (Canada, France, Germany, Italy, Japan and the UK) statements released a side-by-side ("SbS") safe harbor that exempts certain U.S.-parented groups from these rules. The side-by-side Safe Harbor provides that Multinational Enterprise G Groups with an Ultimate Parent Entity in a jurisdiction with qualified SbS regime will not be subject to the Income Inclusion Rule and Undertaxed Profits Rule if they elect the SbS Safe Harbor, applicable as of the beginning of 2026. Since we do not have material operations in jurisdictions with tax rates lower than the Pillar Two minimum, we are not expecting a material impact on our effective tax rate, corporate tax liabilities or cash tax liabilities. We continue to monitor United States and global legislative actions as well as administrative guidance related to Pillar Two for potential impacts.
On July 4, 2025, President Trump signed into law the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA introduces several changes to U.S. federal income tax law, such as suspending the capitalization and amortization of domestic research and development expenditures and reinstating bonus depreciation. It also modifies the deductions available for net controlled foreign corporation tested income (formerly referred to as "global intangible low-taxed income") from non-U.S. subsidiaries and changes the limitations on deductible interest. Under the prior law, not more than 20% of the value of a REIT’s total assets at the end of any quarter could be represented by securities of one or more taxable REIT subsidiaries; the OBBBA increased this threshold to 25% effective January 1, 2026. The effective dates of the OBBBA provisions range from 2025 through 2027. We do not expect the OBBBA provisions to have a material impact on our consolidated financial statements.
The evaluation of an uncertain tax position is a two-step process. The first step is a recognition process whereby we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step is a measurement process whereby a tax position that meets the more likely than not recognition threshold is calculated to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.
We have elected to recognize interest and penalties associated with uncertain tax positions as a component of the Provision (Benefit) for Income Taxes in the accompanying Consolidated Statements of Operations. We recorded decreases of $326, $375 and $2,557 for gross interest and penalties for the years ended December 31, 2025, 2024 and 2023, respectively. We had $4,071 and $3,558 accrued for the payment of interest and penalties as of December 31, 2025 and 2024, respectively.
A summary of tax years that remain subject to examination by major tax jurisdictions is as follows:
| TAX YEARS | TAX JURISDICTION | ||||
| See Below | United States—Federal and State | ||||
| 2022 to present | United Kingdom | ||||
| 2016 and 2018 to present | Canada | ||||
The normal statute of limitations for United States federal tax purposes is three years from the date the tax return is filed; however, the statute of limitations may remain open for periods longer than three years in instances where a federal tax examination is in progress. The 2025, 2024 and 2023 tax years and net operating loss carryforwards utilized in these years remain subject to examination for United States federal tax purposes. The normal statute of limitations for state purposes is between three to five years. However, certain of our state statute of limitations remain open for periods longer than this when audits are in progress.
We are subject to income taxes in the United States and numerous foreign jurisdictions. We are subject to examination by various tax authorities in jurisdictions in which we have business operations or a taxable presence. We regularly assess the likelihood of additional assessments by tax authorities and provide for these matters as appropriate. As of December 31, 2025, we had $28,478 of reserves related to uncertain tax positions, of which $25,020 and $3,458 is included in Other Long-term Liabilities and Deferred Income Taxes, respectively, in the accompanying Consolidated Balance Sheet. As of December 31, 2024, we had $25,876 of reserves related to uncertain tax positions, of which $19,740 and $6,136 is included in Other Long-term Liabilities and Deferred Income Taxes, respectively, in the accompanying Consolidated Balance Sheet. Although we believe our tax estimates are appropriate, the final determination of tax audits and any related litigation could result in changes to our estimates.
A rollforward of unrecognized tax benefits is as follows:
| Gross tax contingencies—January 1, 2023 | $ | 27,753 | |||
| Gross additions based on tax positions related to the current year | 3,511 | ||||
| Gross additions for tax positions of prior years | 634 | ||||
| Gross reductions for tax positions of prior years | (5,454) | ||||
| Lapses of statutes | (2,874) | ||||
| Gross tax contingencies—December 31, 2023 | 23,570 | ||||
| Gross additions based on tax positions related to the current year | 3,091 | ||||
| Gross reductions for tax positions of prior years | (1,698) | ||||
| Acquired unrecognized tax benefits | 5,717 | ||||
| Lapses of statutes | (4,804) | ||||
| Gross tax contingencies—December 31, 2024 | 25,876 | ||||
| Gross additions based on tax positions related to the current year | 4,449 | ||||
| Gross additions for tax positions of prior years | 1,791 | ||||
| Lapses of statutes | (3,598) | ||||
| Settlements | (40) | ||||
| Gross tax contingencies—December 31, 2025 | $ | 28,478 | |||
INCOME TAX PAYMENTS
Pursuant to the disclosure requirements of ASU 2023-09, the following is a summary of income taxes paid by jurisdiction for the year ended December 31, 2025:
| YEAR ENDED DECEMBER 31, | |||||
| Jurisdiction | 2025 | ||||
United States - Federal | $ | 7,239 | |||
| United States - State and local | 4,454 | ||||
| Canada | 53,309 | ||||
| Chile | 6,793 | ||||
| Other | 49,811 | ||||
| Total | $ | 121,606 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 26, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.